Campaign pledges to raise the minimum wage could backfire, forum toldbackground-defaultbackground-default

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FRIDAY, March 31, 2023
Campaign pledges to raise the minimum wage could backfire, forum told

Campaign pledges to raise the minimum wage could backfire, forum told

SUNDAY, March 19, 2023

Election campaign promises to raise the daily minimum wage could end up overburdening businesses, raising prices and damaging the economy, speakers told a forum on the issue on Saturday.

Promises to raise daily minimum wages are a marketing ploy by political parties, but because the Election Commission requires them to honour their pledges, they could end up causing significant damage to the economy, speakers said.

Tanit Sorat, vice-chairman of the Employers’ Confederation of Thai Trade Industry, said political parties and the government would not have to pay for higher wages. However, businesses would not be able to afford the cost of unrealistic wage increases and would have to pass them on to consumers, he said.

Wages should rise based on inflation not politics, Tanit said.

Yongyuth Chalamwong, a labour expert at the Thailand Development Research Institute, said populist policies distort wage rates instead of letting them rise in accord with the economy.

The opposition Pheu Thai Party has promised to raise the daily minimum wage to 600 baht, while the Move Forward Party has promised a daily minimum wage of 450 baht with a yearly increase. Pheu Thai is also promising a starting salary of 25,000 baht a month for university graduates by 2027.

Currently, the daily minimum wage ranges from 328 to 354 baht, depending on the province. These rates took effect last October.

Because the Election Commission requires a political party to implement its campaign policies if it forms a government, these policies can harm the country, Yongyuth said.

Unrealistic wage hikes will create costs for employers that are too high, he said.

Wages should be decided by the tripartite wage committee, he said, referring to the panel that includes representatives of business, workers, and the government.

Sunthorn Hatthi Sengking, a member of the informal workers’ group Non-System Workers’ Association, said she did not care whether or not a political party implemented its campaign promises to raise the minimum wage.

What concerns her is that about 20.2 million workers outside the formal system do not get a guaranteed minimum wage, she said. She hopes the next government will help these workers receive a wage equal to what those in the formal system receive, she said.

The forum was organised by the Isra Institute.